The bid by Teva Pharmaceuticals (Nasdaq:TEVA) for Bayer's (NYSE:BAY) French generic drug business has prompted local investment bank Nessuah Zannex to reiterate its Buy rating and $79 price target, 30% above market.
Teva wants to acquire Bayer Pharma and Bayer Classics, a leading generic drug supplier to the French retail market. Bayer Classics' sales came to €100 million in 2001.
Nessuah analyst Haim Israel said that the deal is expected to come to €200 to 240 million.
The analyst says that Teva's bid is in line with its business strategy to become the world leader in generic drugs, and to expand its European activity by entering into growing markets.
Israel said the 2001 French generic drug market was estimated at $400 million or 3% of drugs and medicare. He expects the market to grow annually by 20% given its extremely low market segment.